Pay for Play Prospectus

“A number of schools will have to shrink the rosters of the football team to fulfill Title IX obligations on the women’s side. That means fewer scholarships to help lift people out of poverty. Next to GI bill, athletics are the next biggest source of scholarships.”

“Most football teams today have 100 plus guys reporting for training camp. In a pay for play system, there would be a limit. It could be half or a little more than that. I wonder if the rosters would be more NFL-like?”

“The NCAA was built to make sure that Student-Athletes to get an education. To have an opportunity. It’s just sad how things have progressed to this point.”

“There will be an enormous amount of litigation. Title IX. Labor law. It’s going to a bumpy next 3-7 years where all these things are worked out in the courts or arbitration.”

“You’re going to have employment law issues – what are you going to do about workers comp? What’s taxable? Not taxing scholarships made sense when tuition was cheap. Now when you look at the full value of a scholarship plus the added salary on top, you’ll need to pay taxes on it. That’s fine for some, but for the kid coming from an impoverished background with limited financial literacy, this could lead to some potential issues.”

“Most Student-Athletes right now are guaranteed a 4-year scholarship and they aren’t going to lose it based on poor performance. Say goodbye to that in pay-for-play. Just like the pros- if you don’t perform or  break a rule in the contract, I’m terminating our agreement.”

“No more hall passes when you’re an employee. You’re expected to perform. If that’s what you want when you get here, god bless you. But that’s a brutal real-world environment.”

“Why would we get paid as Olympic athletes if we’re losing money for the school. No surprise that we would be the first to go.”

“Auburn isn’t going to be able to provide scholarship support to gymnast Suni Lee. Michigan won’t be able to put resources into training the next Michael Phelps.”

“It’s not just Team USA  that will be impacted – it’s athletes from across the Globe. Just look at these last Olympics – you had Sydney McLaughlin from Puerto Rico who won a gold medal and ran at Kentucky, Jacob Dawson who is British, and won a bronze and rows at Washington.”

“NFL is a huge loser because they will lose the training ground. The number of athletes they are able to scout is going to get narrowed.”

“Go find a bad minor league with minimal set-up and that’s what it will look like for most college campuses that aren’t Texas, Alabama or Oklahoma. Talk to any baseball player in the minors, it’s night and day to college.”

“Coaches’ salaries are grotesque and that’s a weakness in the system. Those will definitely need to come down for schools to sustain their athletic departments.”

“Currently on a campuses, there is a wealth of services aimed at assisting student-athletes – therapists, tutors, nutritionists – all that shrinks or go away to make up for budget shortfalls.”

“I wonder what kind of medical support Universities would be prepared to offer in a new system. Also, would athletes be required to take any classes at all?”

“While 40-50 schools will lead the way, middle to lower tier schools will have to go in a different direction and not participate. They can’t drain their endowments on this.”

“If you think you’re going to the pros – only a few number of schools will attract you. If you want an education, that’s another. Schools will stop conning themselves that they’re in a game that they really are not.”

“This will lead to more parity. With a concentration of more programs in bigger leagues, you’re going to see more 7-4 and 4-7 records.”

“I don’t know if donors will give up their income as freely as they do now. It’s one thing to give a tax-deductible gift when they are helping a student-athlete wind their way through college. But I don’t think they will be as willing to donate to a semi-pro program where athletes are paid. You don’t see many donation programs in the professional ranks.”

“With big checks going to football and basketball players, you’ll have to balance that out with equal checks to the women’s players because of Title IX. So now instead of a $2 million loss in women’s basketball, you’ve got an even larger loss with added salaries.”

This concept was popularized by ESPN college basketball analyst Jay Bilas, and proposes a free market system in which schools offer up contracts to players for any amount of money.

As a thought experiment, we looked at the the top five high school football players from 2021 according to 247Sports and speculated what yearly salary they could command in an open market. We took the annual rookie salary of the top NFL draft picks for each position in the last two years and factored the ratio of D1 to NFL athletes to determine market value.

Originally proposed by New York Times columnist Joe Nocera in an op-ed published in 2016, this scenario factors in the following parameters:

• • Salary cap of $3 million for football and $650,000 for men’s basketball
  • Minimum salary of $25,000 per player in football and men’s basketball
  • 10% of TV revenue distributed by conferences
  • 8-year academic scholarships

In the table below, we analyze how a salary cap scenario would play out in three sample sets.

*This scenario assumes that 125 to 143 additional grad students will be on full scholarship*

Now we factor in the added expenditure for paying football and basketball players and how that will affect revenue and deficits for each peer group set moving forward.

Originally hinted at in the listed demands from the Pac-12 We Are United10 group during the summer of 2020, in this scenario, revenue earned from media rights that is distributed among schools by their Conference would be split 50/50, with half divided equally among all student-athletes.

Now we move that 50% of media revenue to the expense column to see how it would affect the bottom line for each peer set group:

Now operating with a deficit, athletic departments would likely have to cut down on the number of scholarship sports they offer – while still maintaining a Title IX balance. Below is a hypothetical look at how many scholarships could potentially be cut. This does not account for staff layoffs or other cost cutting measures.